It is indeed challenging and stressful to deal with the debt collection agencies. In order to protect your credit rating, you need to have proper strategy to negotiate with them.

What can be done when you have been contacted by a debt collector regarding your debt issues?

• First thing first, you are reminded to know your rights as a debtor. You should find out the details of the debt collection statute of limitations in your state to see whether you are still legally obligated for your old debts. If the time limit has expired, you should write a letter to the debt collector to notify the collector that you are not responsible for the debts anymore. You can inform the collector not to contact you anymore.
• If your debts are still “new”, you are advised to check your credit report carefully to verify the debt amount. At the same time, you can call up your original creditor to find out whether the collection agency is legally authorized to collect debt from you. According to the Fair Debt Collection Practices Act, every consumer has the right to request for the proof of debt before making any payment.
• Once the confirmation is done, you can start negotiating with your debt collection agency to request for debt reduction. You should inform the collector about the financial hardship you are facing and ask for a favor from the collector. You can propose to settle your debt at certain amount which you can afford to pay and get the approval from the collector.
• At the same time, discuss with the representative to see whether he or she can help to remove all the negative items from your credit report. You are reminded not to ignore the debt collection agent because any negative entry made by the agent on your credit report will definitely lower your credit score.
• The negotiation process is considered complete when you receive a settlement agreement from the debt collection agent. In the agreement, the collector must assure that your account will not be sold to other parties anymore in the future and no collection activity will take place once you have made the payment.

During economy crisis, when your card providers have not heard from you for quite a long time, do not expect them to write off your credit card debts. Non-stop phone calls from debt collection agencies are waiting for you. Hence, you are reminded to take proper steps to deal with them so that your credit score will not be damaged badly.